The following data were available for ABC Company, which uses perpetual system, at Dec 31, 20X2: Accounts Payable, beg P15,000 Accounts Payable, end P10,000 Inventory, beg P17,000 Inventory, end P9,000 Cash payment to creditors(net of 2% discount) 294,000 Purchase returns, P5,000 How much were the credit purchases during the period? 285,000 294,000 300,000
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Accounts Payable, beg P15,000
Accounts Payable, end P10,000
Inventory, beg P17,000
Inventory, end P9,000
Cash payment to creditors(net of 2% discount) 294,000
Purchase returns, P5,000
How much were the credit purchases during the period?
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